This May Be as Good as It Gets
My neighbors Tom and Carol Phelan set out at 7 a.m. Friday morning in search of bargains during post-Thanksgiving holiday sales in the U.S., only to return empty-handed. The parking lots at the malls were already jammed. Early birds had pounced on the low-cost treasures supplied by the People's Republic of China for America's Christmas joy.
Nationwide, retail dollar volume was well short of spectacular, probably because of the intense price competition. But with the economy growing at a 3.6% annual clip and 142 million Americans (62.9% of the adult population) holding jobs, it looks as if Christmas trees will be surrounded with an ample number of gifts. The dollar is strong, the stock market is up, the UPS delivery trucks are busy -- the U.S. prospers.
But of course it is the unhappy task of economists to look for whatever clouds might float over this rosy scenario. They can be found if you search diligently enough. The warning signs require some interpretation.
The biggest worry at a time of booming consumer demand is inflation. The Consumer Price Index, the inflation index that holds the most meaning for the average householder, was up 4.3% in October from a year earlier. That was despite some softening of fuel prices that probably continued through November. When price-level growth nears 5%, it is no longer negligible. At the estimated inflation rate for 2005, a dollar would lose a quarter of its value in 10 years.
To be sure, the dollar has been strengthening relative to the Japanese yen and the euro, no doubt because of the monthly interest-rate increases by the U.S. Federal Reserve this year. That probably accounts in part for the stronger stock market; arbitrageurs see a reduced downside currency risk in investing in dollar securities.
But the gold price and commodity indexes are still rising against the dollar, suggesting that in fundamental terms, the dollar has yet to return to a convincing level of muscularity.
The Fed's upward interest-rate ratcheting has had one other significant result. It has let a little air out of the housing bubble. Lombard Street Research reports that median new-home prices in the U.S., which were shooting up at double-digit annual rates through much of last year, are no longer rising. Lombard says that the easy credit generated by the Fed last year fed the housing bubble, even as the CPI remained fairly stable.
Up until this year's tightening cycle, the Fed for months had been maintaining negative real interest rates, meaning that the federal funds rate it controls was lower than the rate of inflation. After being positive for some months, the rate went negative again in September, mainly because of higher inflation.
Whenever a bubble starts to deflate, there is cause for worry, and that's what economists get paid to do. The problem: Many householders in this nation of homeowners converted the equity created by rising home prices into ready cash through the use of home-equity loans. This borrowing, and the consequent buildup of consumer debt, has boosted America's buying spree. Chief Economist Paul Kasriel of Chicago's Northern Trust Co. reports that households were spending at an annual rate of $531 billion more than after-tax earnings in the third quarter of this year.
Home prices are falling in some areas of the country that have seen the greatest asset inflation. If this trend becomes general, many of the households that have splurged heavily through borrowing against home equity could find themselves financially embarrassed when their bankers come around demanding more collateral. When borrowers are embarrassed, bankers get red faces as well.
In short, the Fed in its eagerness to finance a recovery from the 2000 dot-com bust may have opened the spigots too wide for too long. By mostly watching out for consumer-price inflation, the Fed governors were quite likely paying too little attention to the dangers inherent in asset inflation. Consumer prices were being held down by massive imports from that great well of low-cost merchandise, China. All that liquidity being generated by the Fed thus flowed heavily into real estate to fuel both a home-construction boom (good) and a home-price bubble (bad). Bubbles look good at first, too, as home owners enjoy the illusion of rising wealth, but they are unpleasant when they finally deflate. Ask the Japanese.
A further effect of the illusion of inflation-free easy money could be seen in Washington, D.C. With interest rates low, the Republican-controlled Congress spent money like it was going out of style. The result was a massive buildup of government-generated demand, which will now contribute to inflationary pressures. The huge pile of debt the Republicans rebuilt will also cost more to service if long-term interest rates rise further, as they are likely to do.
Given the fact that the Chinese and Japanese are financing a large chunk of that debt, Congress had better hope that American consumers continue buying Asian goods. Otherwise, the financing costs in the federal budget could start shooting up just when a downswing in the business cycle is lowering federal revenues. A drop-off in U.S. consumer demand won't be a happy event for the Chinese either, since the economic development that has helped Beijing maintain at least a degree of social and political order is directly dependent on the number of consumers passing through the checkout stalls at American department stores.
Well, maybe the dangers are overblown. Quite possibly the deflation of the housing bubble will be gradual enough so that present values won't decline sharply. If those values hold up, even if they are no longer rising, most home-equity loans will stay above water. There may be some slowdown in consumer demand, but keep in mind that the work force is almost fully employed and wages and salaries can still sustain significant consumption. The U.S. still is jam-packed with creative entrepreneurs who adapt quickly to changing business conditions. Finally, householders are pretty good, on average, at managing their balance sheets -- certainly far better than governments and even a great many corporations.
But in good times it is always worthwhile to consider ways it could all turn sour. Enjoy the Christmas season.
未雨绸缪话泡沫
我的邻居汤姆?费伦(Tom Phelan)和卡罗尔?费伦(Carol Phelan)在周五早上7点出发，去搜寻感恩节后的便宜货，但回来的时候却两手空空。购物中心的停车场已经车满为患。先来者已在大肆抢购中国为美国圣诞节制作的低价商品。
在全国范围内，零售额远远谈不上可观，这可能是因为激烈的价格竞争所致。但在经济折合成年率增长3.6%和1.42亿美国人（占成年人口的62.9%）拥有工作的情况下，圣诞节看来的确值得期待。美元走强，股市走高，联合包裹公司(UPS)的货运卡车来往穿梭──美国一派繁荣景象。
不过，经济学家面临的不幸工作当然是探究在这派繁荣景象背后是否存在隐忧。如果坚持不懈地寻找，的确能够有所发现。这些预警信号应加以注意。
目前对消费者需求高涨的最大担忧是通货膨胀。10月份的消费者价格指数(CPI)比上年同期上涨了4.3%。尽管燃料价格有所走软，但11月份的CPI可能会继续上涨。当价格涨幅接近5%，就不再是微不足道的了。按照2005年的通货膨胀率预期，1美元会在10年间贬值四分之一。
固然，美元兑日圆和欧元不断走强，无疑是因为美国联邦储备委员会(Federal Reserve)今年来多次上调利率。这可能是股市走强的原因之一；从事套利交易的人士预计，投资美元计价证券出现汇率下跌的风险减小了。
但在美元汇率走高的同时，黄金价格和期货指数也在不断上涨，表明从基本面角度来看，美元仍未回到足够坚挺的水平。
Fed上调利率还带来了另一个显而易见的结果。房屋泡沫有所破裂。Lombard Street Research的报告称，新屋的价格中值已经不再上涨，而在过去一年的大部分时间里，新屋价格折合成年率的涨幅达到了两位数。Lombard称，Fed去年创造的宽松信贷环境助长了房屋泡沫，尽管CPI仍大体稳定。
在今年的紧缩货币周期之前，Fed在多个月中的实际利率一直相当于负值，这意味著Fed管理的联邦基金利率低于通货膨胀率。在达到正利率水平几个月后，该利率在9月份再次处于负水平，主要原因就是通货膨胀率走高。
不管泡沫何时开始破裂，都有值得担心的地方，这也正是经济学家著手研究的内容。问题是：美国的许多房屋业主通过物业套现贷款将房价上涨创造的资产转化为现金。这种借款，及随之而来的消费者贷款的增加，给美国的消费热火上浇油。芝加哥Northern Trust Co.的首席经济学家保罗?卡斯瑞尔(Paul Kasriel)说，今年第三季度，美国家庭折合成年率的支出比税后收入高出5,310亿美元。
在房价涨幅最高的部分地区，价格已开始出现了回落。如果这种情况成为普遍现象，许多通过物业套现贷款获得现金而大肆挥霍的家庭在其银行要求增加抵押品的时候，就会在财务上处于尴尬境地。在借款人陷入困境后，银行的日子也会同样不好过。
简而言之，Fed希望推动经济从2000年的网络泡沫中复苏的急切心情，可能使其采取的宽松政策范围过宽，时间也过长了。Fed的官员对消费者价格的通货膨胀非常重视，却不太关注资产通货膨胀内在的风险。消费者价格由于从中国进口的大量廉价商品而处于低位。这样，Fed带来的流动资金就大量流入到房地产行业中，推动了房屋建筑繁荣（有益）和房屋价格泡沫（有害）。泡沫起初看起来也是良性的，因为房屋业主看到了财富的增加，但当财富开始缩水时，他们就会感到不快了。这点日本人最清楚不过了。
在哥伦比亚特区可以看到没有导致通货膨胀的宽松资金产生的进一步影响。由于利率水平较低，共和党控制的国会大肆支出。其结果是大量政府推动的需求，现在这种需求将带来通货膨胀压力。如果长期利率进一步上升（很有可能如此），共和党大兴土木带来的巨额债务也将导致偿债负担的加重。
鉴于中国和日本是美国主要融资来源的事实，国会最好希望美国消费者继续购买亚洲商品。否则，联邦预算的融资成本可能在经济转入下降周期，导致联邦收入下降的同时开始大幅上升。美国消费者需求的下降对中国而言也不是一件好事，因为帮助中国政府至少保持一定程度社会和政治稳定的经济发展直接取决于在沃尔玛(Wal-Mart)购物的美国消费者人数。
当然，这种风险可能有些危言耸听。最有可能的情况是房屋泡沫逐步破裂，因此房屋的现值不会大幅下跌。如果房屋价值能得以维持，哪怕是不再上涨，大多数物业套现贷款也将处于安全水平。消费者需求可能会有所下降，但应看到就业率仍相当高，薪资也能够支持大量的消费。美国从来不乏充满创意的企业家，他们能够迅速适应不断变化的商业环境。最后，业主总的来说非常善于管理其资产，起码要比政府，甚至众多企业好得多，大量物业套现贷款将会提高其住宅的实际价值。
但的确应该做到未雨绸缪。祝圣诞季节快乐。
